One of the Concerns Highlighted by the Recent fiNancial Crisis

question 15

Essay

One of the concerns highlighted by the recent financial crisis, is the existence of banks that are 'too big to fail'.These banks, it is argued, carry with them an implicit guarantee that they will be saved in times of financial distress.How do you think the capital structure of these banks compares to that of the other banks, based on the optimal capital structure theories?

Determine the appropriate cost allocation for shared services between different parts of an organization.

Understand the concept of transfer pricing and its impact on divisional profitability.

Analyze the effect of varying rates of return on investment on divisional performance metrics.

Understand the concept of labor efficiency variance and its impact on job costing.

---

Definitions:

Good

A tangible item or consumable entity that can satisfy a want, need, or desire, making it useful or enjoyable to consumers.

Securities and Exchange Commission

A U.S. government agency responsible for regulating the securities markets and protecting investors by enforcing securities laws.

Regulatory Capture

A situation in which regulatory agencies are dominated by the industries they are supposed to be regulating, often leading to decision-making that benefits the industry at the expense of the public interest.

Wall Street

A symbol for the financial markets and institutions located in the Financial District of Lower Manhattan, New York City, often associated with the American financial sector and stock market.